May 12, 2015 Comments (0) Blog, Securities Fraud

Recovery of Citigroup Reverse Convertible Notes Losses

(Last Updated On: July 17, 2015)

Have you suffered losses investing in Citigroup Reverse Convertible Notes? If so, the securities attorneys of The White Law Group may be able to help you recover your losses in a FINRA arbitration claim against the brokerage firm that recommended the investment.

Reverse Convertible Notes (“RCNs”) are extremely complex investments that often involve terms, features and risks that can be difficult for individual investors and investment professionals alike to evaluate. In fact, in most cases the investor in an RCN bears all of the downside risk while the issuer of the note receives all of the potential upside.

RCNs are notes whose repayment of principal is linked to the lowest value of the reference security during the RCN’s term. If the reference security’s value drops below a “trigger” price during the RCN’s term, then the RCN will pay the lesser of its face value or the market value of the shares that could have been purchased with the RCN’s face value on the pricing date.  If the reference security’s value does not drop below the “trigger” price, then the RCN will pay its face value at maturity.

Essentially, in addition to taking on the credit risk of the issuer, the investor also takes on the price risk of the referenced security or securities. Meanwhile, the issuer has passed its risk on to the unsuspecting investor. Notably, the issuers of RCNs are generally large financial institutions, such as Citigroup, while the investor is typically an unsophisticated individual who is attracted by the high coupon rate and doesn’t understand the level of risk that comes with these highly complex structured investments.

Furthermore, the issuer charges an up-front fee to assemble and package the RCN’s components. The fee typically ranges from one percent to eight percent or more, and is usually described in the prospectus as “built-in costs” or “costs of hedging.”

The investor is also exposed to potential liquidity risk. The issuer is not required to maintain a secondary market, and, like most structured products, there may be no buyer if the investor needed to liquidate the RCN prior to maturity.

Altogether, RCNs are extremely complex, high-risk, and frequently illiquid investments that are difficult to understand and are not suitable for unsophisticated investors.

Brokerage firms that sell RCNs are required to evaluate whether they are suitable given the investor’s age, risk tolerance and investment objectives, net worth, and investment experience. Firms that make unsuitable recommendations can be held responsible for losses in a FINRA arbitration claim.

If you suffered losses investing in Citigroup Reverse Convertible Notes and would like a free consultation with a securities attorney, please call The White Law Group at 312-238-9650.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, visit http://www.WhiteSecuritiesLaw.com.

The following is a list of some of the Citigroup Reverse Convertible Notes offered:

CUSIP Issuer Product Name
17314V726 Citigroup ELKS based upon the common stock of SanDisk Corp.
17314V759 Citigroup ELKS based upon the common stock of Barrick Gold Corp.
17314V742 Citigroup Equity linked Securities (ELKS) based upon the common stock of Apple, Inc.
17314V718 Citigroup ELKS based upon the common stock of Apple, Inc.
17314V643 Citigroup ELKS based upon the common stock of Alcoa, Inc.
17314V684 Citigroup ELKS Based Upon the Common Stock of Chesapeake Energy Corp.
17314V577 Citigroup ELKS based upon the common stock of Freeport-McMoRan Copper & Gold, Inc.
17314V619 Citigroup ELKS based upon the common stock of Alcoa, Inc.
17314V544 Citigroup ELKS based upon the common stock of American Express Co.
17314V429 Citigroup ELKS Based Upon the Common Stock of JDS Uniphase Corporation
17314V478 Citigroup ELKS based upon the common stock of American Express Co.
17314V551 Citigroup ELKS Based Upon the Common Stock of The Dow Chemical Company
17314V395 Citigroup ELKS based upon the common stock of Newmont Mining Corp.
17314V361 Citigroup ELKS Based Upon the Common Stock of Las Vegas Sands Corp.
17314V379 Citigroup ELKS based upon the common stock of Apple, Inc.
17314V387 Citigroup ELKS based upon the common stock of Freeport-McMoRan Copper & Gold, Inc.
17314V353 Citigroup ELKS Based Upon the Common Stock of Halliburton Company
17314V288 Citigroup ELKS Based Upon the Common Stock of JPMorgan Chase & Co
17314V296 Citigroup ELKS Based Upon the Common Stock of Yahoo! Inc
17314V312 Citigroup ELKS Based Upon the Common Stock of Halliburton Company
17314V221 Citigroup ELKS based upon the common stock of Chevron Corp
17314V171 Citigroup ELKS Based Upon the Common Stock of Halliburton Company
17314V247 Citigroup Equity LinKed Securities (ELKS) based upon the common stock of Goldman Sachs Group, Inc.
17316G206 Citigroup ELKS based upon the common stock of SanDisk Corp.
17314V130 Citigroup ELKS based upon the common stock of The Boeing Co.
17314V148 Citigroup ELKS based upon the common stock of Barrick Gold Corp.
17314V155 Citigroup ELKS based upon the common stock of Apple, Inc.
17316G404 Citigroup ELKS based upon the common stock of Monsanto Co.
17316G503 Citigroup ELKS based upon the common stock of J.C. Penney Co., Inc.
17316G883 Citigroup ELKS based upon the American Depository Shares representing the Class A Ordinary Shares of Baidu, In
17316G792 Citigroup ELKS Based Upon the Common Stock of JDS Uniphase Corporation
17316G842 Citigroup ELKS Based Upon the Common Stock of General Electric Company
17316G859 Citigroup ELKS Based Upon the Common Stock of Chesapeake Energy Corp.
17316G867 Citigroup ELKS based upon the common stock of American Express Co.
17316G776 Citigroup ELKS linked to Netflix, Inc.
17316G750 Citigroup ELKS linked to Best Buy Co., Inc.
17316G768 Citigroup ELKS linked to MetLife, Inc.
17316G651 Citigroup ELKS linked to Newmont Mining Corp.
17316G669 Citigroup ELKS linked to Yahoo! Inc.
17316G677 Citigroup ELKS linked to Schlumberger, Ltd.
17316G685 Citigroup ELKS linked to Wells Fargo & Co.
17316G552 Citigroup ELKS linked to The Dow Chemical Company
17316G545 Citigroup ELKS linked to Netflix, Inc.
17316G586 Citigroup ELKS linked to The Dow Chemical Company
17316G594 Citigroup ELKS linked to Ford Motor Company
17316G511 Citigroup ELKS linked to Las Vegas Sands Corp.
17316G529 Citigroup ELKS linked to Apple, Inc.
17316G537 Citigroup ELKS linked to Textron Inc.
17316G412 Citigroup ELKS linked to MBIA Inc.
17316G362 Citigroup ELKS linked to Ford Motor Company
17316G321 Citigroup ELKS linked to Macy’s, Inc.
17316G396 Citigroup ELKS linked to J.C. Penney Co., Inc.
17316G446 Citigroup ELKS linked to Amazon.com, Inc.
17316G263 Citigroup ELKS linked to Barrick Gold Corp.
17316G214 Citigroup ELKS linked to American Express Co.
17316G271 Citigroup ELKS linked to U.S. Steel Corp.
17316G289 Citigroup ELKS linked to Macy’s, Inc.
17316G297 Citigroup ELKS linked to Chesapeak Energy Corp.
17316G172 Citigroup ELKS linked to JDS Uniphase
17316G131 Citigroup ELKS linked to LDK Solar Co., Ltd.
17316G180 Citigroup ELKS linked to Potash Corp. of Saskatchewan, Inc.
17316G198 Citigroup ELKS linked to Bank of America Corp.
17317U303 Citigroup ELKS linked to SINA Corporation
17317U501 Citigroup ELKS linked to YAHOO! Inc.
17316G123 Citigroup ELKS linked to Schlumberger, Ltd.
17317U204 Citigroup ELKS linked to Barclays Plc.
17317U782 Citigroup ELKS linked to Ford Motor Company
17317U865 Citigroup ELKS linked to The Dow Chemical Company
17317U873 Citigroup ELKS linked to The Goodyear Tire & Rubber Co.
17317U758 Citigroup ELKS linked to Transocean, Ltd.
17317U766 Citigroup ELKS linked to Broadcom Corp.
17317U774 Citigroup ELKS linked to Las Vegas Sands Corp.
17317U675 Citigroup ELKS linked to General Electric Company
17317U725 Citigroup ELKS linked to Amazon.com, Inc.
17317U733 Citigroup ELKS linked to Freeport-McMoRan Copper & Gold, Inc.
17317U626 Citigroup ELKS linked to American Express Co.
17317U634 Citigroup ELKS linked to Chesapeake Energy Corp.
17317U592 Citigroup ELKS linked to General Electric Company
17317U618 Citigroup ELKS linked to Potash Corp. of Saskatchewan, Inc.
17317U519 Citigroup ELKS linked to Ford Motor Company
17317U535 Citigroup ELKS linked to Schlumberger, Ltd.
17317U188 Citigroup Single Observation ELKS linked to Freeport-McMoRan Copper & Gold Inc
17317U170 Citigroup Single Observation ELKS Based Upon the Common Stock of Valero Energy Corporation
17317U113 Citigroup Single Observation ELKS Based Upon the Common Stock of Bank of America Corporation
17318Q707 Citigroup Single Observation ELKS Based Upon the Common Stock of Freeport-McMoRan Copper & Gold Inc
17318Q871 Citigroup Single Observation ELKS Based Upon the Common Stock of Halliburton Co.
1730T0XJ3 Citigroup Autocallable Contingent Coupon Equity Linked Securities Based on Apple Inc
17318Q830 Citigroup Single Observation ELKS Based Upon the Common Stock of Valero Energy Corporation
17318Q764 Citigroup Single Observation ELKS Based Upon the Common Stock of Broadcom Corp.
17318Q715 Citigroup Single Observation ELKS linked to Las Vegas Sands Corp
17318Q624 Citigroup Single Observation ELKS linked to Freeport-McMoRan Copper & Gold Inc
17318Q640 Citigroup Single Observation ELKS linked to Cobalt International Energy Inc.
1730T0ZC6 Citigroup Autocallable Contingent Coupon Equity Linked Securities Linked to Amazon.com Inc
17318Q350 Citigroup Single Observation ELKS linked to Apple, Inc.
17318Q384 Citigroup Single Observation ELKS linked to Halliburton Company
17317U287 Citigroup Single Observation ELKS linked to Las Vegas Sands Corp.
17317U352 Citigroup Single Observation ELKS linked to Las Vegas Sands Corp.
17317U410 Citigroup Single Observation ELKS linked to Dow Chemical Company
17316G636 Citigroup Reverse Convertible Note linked to Las Vegas Sands Corp.
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